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August 31, 2012

[Forecasts
for the coming year are less than rosy. "Weak growth is likely to remain a
strong overhang on the corporate sector, and in the near-term raises chances of
a sovereign downgrade, particularly in the light of the stalemate on the policy
front," said Tirthankar Patnaik, the director of institutional research at
Religare Capital Markets.]

The Indian
gross domestic productreportreleased Friday for the April-June
quarter showed that the economy was doing only marginally better than in the
previous quarter. Growth was up 5.5 percent during the quarter from a year
earlier, the lowest rise in three years, compared with 5.3 percent in the
period ended in March, which was the weakest in nine years.

Analysts
said high interest rates have dented investment, while the investor outlook
continued to remain bleak. "High inflation, wide trade and current account
deficits, bloated subsidies and a gaping fiscal deficit have all taken a toll
on the real economy, while the rupee has plunged 25 percent since July
2011," said Jyoti Narasimhan, senior principal economist at IHS Global
Insight. "The investment environment remains toxic because of corruption
scandals, policy inertia and fierce political opposition have stifled progress
on reform."

The report
showed that the manufacturing output in the April-June quarter rose only 0.2
percent from a year prior, dashing prospects for growth. The growth in
agriculture, forestry and fishing was 2.9 percent, while mining and quarrying
remained nearly flat at 0.1 percent. The sectors that showed significant growth
in the quarter were construction with 10.9 percent growth, financing,
insurance, real estate and business services at 10.8 percent and community,
social and personal services, which registered a 7.9 percent growth.

Forecasts
for the coming year are less than rosy. "Weak growth is likely to remain a
strong overhang on the corporate sector, and in the near-term raises chances of
a sovereign downgrade, particularly in the light of the stalemate on the policy
front," said Tirthankar Patnaik, the director of institutional research at
Religare Capital Markets.

A rebound of
the economy is expected to be a gradual process. "The pickup in growth was
encouraging, but growth still suffers due to external headwinds and supply
constraints," said Leif Lybecker Eskesen, chief economist for India and Asean at HSBC Global Research. "We expect a
gradual recovery from here on the back of structural reform progress and global
economic stabilization, although there is a risk that it could prove more
protracted."

All eyes are
now on the Reserve Bank of India, the central bank, which meets Sept. 17 to review
monetary policy. While there are expectations that a low growth rate would
cause the R.B.I. to cut interest rates, justlast week the
central bank saidthat
lower interest rates alone were not enough to jump-start the investment cycle.
"Despite ever-worsening growth data, IHS Global Insight, expects the
R.B.I. to wait until October to resume its rate cuts," said Jyoti
Narasimhan, senior principal economist at the firm. "We expect only a
shallow recovery in manufacturing and investment, and only a mild upturn is
expected by year-end."

[Ms. Kodnani's conviction and long prison sentence are a blow to Mr. Modi's
efforts to distance himself from responsibility for the deaths and could derail
his campaign to lead the Bharatiya Janata Party. Since Muslims represent nearly
15 percent of India's population, no political party can afford to alienate
them entirely.]

Former Gujarat minister and a
member of India’s main opposition Bharatiya

Janata Party Maya Kodnani, left, is
led by police on her arrival

at a special court in Ahmedabad, India, Friday,
Aug. 31, 2012.

NEW DELHI, India- A top lieutenant of one India's most powerful politicians was sentenced to 28 years in
prison Friday for her role in a deadly attack that killed at least 94 people
during the 2002 Gujarat riots.

Mayaben Kodnani, a state legislator and former state education
minister, was given a 28-year prison term after being convicted of murder,
arson and conspiracy. The other 31 defendants were given decades-long prison
terms, including one who must remain in prison for the rest of his life.

Ms. Kodnani was a confidant of Narendra Modi, Gujarat's
chief minister and a top contender to become the Bharatiya Janata Party's
candidate for prime minister in national elections scheduled for 2014. Mr. Modi
has long been plagued by accusations that he discouraged police from protecting
Muslims during the riots, accusations he has denied.

Ms. Kodnani's conviction and long prison sentence are a blow to Mr. Modi's
efforts to distance himself from responsibility for the deaths and could derail
his campaign to lead the Bharatiya Janata Party. Since Muslims represent nearly
15 percent of India's population, no political party can afford to alienate
them entirely.

The judge in the case, Jyotsnaben Yagnik, said that Ms. Kodnani and
Babu Bajrangi, a member of a Hindu hard-line organization, were the key
conspirators in the massacre of mostly women and children in the Muslim
neighborhood of Naroda Patia.

Akhil Desai, the prosecutor in the case, said that Judge Yagnik
intended the long sentences to serve as a warning. "The judge observed
that the riots were very brutal and the punishment should be such that such
offenses should never occur again," Mr. Desai said.

The Gujarat riots, which claimed the lives of more than 1,000
people, are the first in India's history to be followed by significant prosecutions and
convictions. Perhaps because of that response, there has been no communal
violence on the scale of the Gujarat riots, although ethnic attacks in Assam in recent months have claimed at least 78 lives.

[The arrest sparked weeks of public protests. Nasheed lost the support of the military and police, and resigned in February. He has since insisted that he wasousted in a coupand his supporters hold daily protests calling for an early election.]

Associated Press in Colombo

Former president ousted in February is charged with illegally

detaining a senior judge, but court says it has no jurisdiction

A court in theMaldiveshas
refused to try former presidentMohamed Nasheed, saying it
has no authority to do so, after prosecutors charged him with illegally
detaining a senior judge earlier this year.

Deputy prosecutor Hussain Shameem said on Monday that his
office had received a letter from the court explaining that it had no
jurisdiction because of its location. Prosecutors had filed the case outside
the capital in what they said was an attempt to avoid conflict of interest.
Shameem said prosecutors were now considering alternatives.

Nasheed, who was charged earlier this month with ordering
the judge's secret detention in January, had accused the judge of political favouritism
and corruption.

The arrest sparked
weeks of public protests. Nasheed lost the support of the military and police,
and resigned in February. He has since insisted that he wasousted
in a coupand his
supporters hold daily protests calling for an early election.

Separately, police said on Monday that they have summoned
Nasheed for questioning over a taped telephone conversation with a party official,
in which he allegedly instructed her to gather a group of people to attack the
police.

Police spokesman Hassaan Haneef said Nasheed had been
asked to appear on Thursday.

Nasheed's spokesman Hamid Abdul Ghafoor called the
summons an attempt to intimidate Nasheed and accused police of trying to link a
recent killing of a policeman to his Maldivian Democratic Party.

"The government is blaming MDP and especially
Nasheed for all social disturbances," Ghafoor said. He said Nasheed would
honour the summons.

Maldives held its first multiparty election in 2008 in which
Nasheed became president.